you can't cut deep enough to cover $1B in interest paymets, maybe now people will figure out that Musk is the wealthiest man in the world by taking tax dollars as subsidies for all his businesses.
Just for some context, Twitter has around $4.5B in revenue per year. Clearly, you can't cut all spending. It looks like the "cost of revenue" is around half that ($2B) and you probably can't cut that. Do you cut sales and marketing? Well, then your revenue probably ends up declining. Do you cut R&D? Well, eventually others are going to eat your lunch. You have $1.6B in R&D costs and $1.2B in sales and marketing and $700M in admin costs (like Human Resources).
As you note, it's really hard to cut deep enough to cover $1B in interest payments without cutting stuff that ends up hurting your revenue. As Twitter cuts their R&D, they're leaving themselves open to missing out on the future. Should Twitter have continued to invest in Vine? Well, the benefit of hindsight says "yes" given TikTok's success. As much as everyone is making fun of Meta's metaverse plans, it's certainly possible it'll be important in the future. We really just don't know. I remember everyone saying the iPhone was a silly toy and people would want to keep their Blackberries and Windows Mobile devices with keyboards. We can literally see the future and say, "nah, that'll never happen."
If Musk cuts engineering too much, does the service just become mediocre?
As you say, it's hard to cut deep enough to come up with $1B.
Going into a sector with lots of incentives is good business. It's not like he lobbied congress for those subsidies and they were tailored so that basically only he could qualify. Everyone had access to all of those subsidies, Musk was a nobody before Tesla and SpaceX.
Why didn't Ford and Boeing, companies with a much better footing than Musk, simply move into those sectors (EVs and re-usable rockets, respectively) and mop up all those subsidies for themselves?
The Roadster was released in 2008. Barely any money was spent on lobbying until after the Model S was already released (2012), the Powerwall announced (2015) and the Model X was released (2015). That's also post-IPO (2010).
Tesla was already a successful, innovative electric car company before it started lobbying like a regular car company.
All of the risk that paid off (what makes a businessman a good businessman) was done in the early days when he invested 6.5 million that he turned into billions.
He invested 6.5m of the 7.5m that was raised in funding. Without that investment, Tesla probably dies on the vine. He didn't "create" the Roadster but he did believe in the electric car and backed it up with a significant investment that allowed the people who were hired to create it to stay employed.
He deserves credit for believing in the David and turning it into Goliath (of EVs), even if government subsidies helped.
I support the government subsidizing clean energy, electric cars and cheaper access to space and I think it's hypocritical to turn around and shit on the companies that take advantage of those subsidies and do exactly the thing that they are meant to encourage.
Large established companies would be legally cautious on things like fake battery swap stations (couldn't operate with real road wear, just taken from the battery install tooling in the factiry) to claim hundreds of millions in subsidies, or using NASA money to buy junk bonds in another company he had interest in (SolarCity), then giving a presentation with faked shingles to bail out the company through a merger and prevent the bonds backed by NASA money from failing and the repercussions from that. Then use SpaceX to create Boring Company without giving them a stake while Musk got 90% (later reversed in a quiet settlement giving SpaceX around 6%).
You really shoehorned that one in there. An established company wouldn't have to do all that, they could have just made and electric car and/or re-usable rockets.
You need to do it in a way that does not make the remaining core hugely dysfunctional. And it would be miracle if Musk could.
And trolling does not help either. The sink thing was trolling and between that and layouts, the remaining people will be dysfunctional for quite a long time.
Wonder if he's going to use money from his other companies for interest payments for twitter, and then claim tax deductions for those companies because these were interest payments.
FWIW I have no idea how finances work, just can imagine Elon getting into weird loopholes.
He can only do that if he owned Tesla and SpaceX outright. But, Tesla is a publicly-traded company with tens of thousands of shareholders that’ll sue him into oblivion if he tries that.
SpaceX is privately-held, but has raised billions of dollars from dozens of investors, so that won’t fly neither.
As you note, it's really hard to cut deep enough to cover $1B in interest payments without cutting stuff that ends up hurting your revenue. As Twitter cuts their R&D, they're leaving themselves open to missing out on the future. Should Twitter have continued to invest in Vine? Well, the benefit of hindsight says "yes" given TikTok's success. As much as everyone is making fun of Meta's metaverse plans, it's certainly possible it'll be important in the future. We really just don't know. I remember everyone saying the iPhone was a silly toy and people would want to keep their Blackberries and Windows Mobile devices with keyboards. We can literally see the future and say, "nah, that'll never happen."
If Musk cuts engineering too much, does the service just become mediocre?
As you say, it's hard to cut deep enough to come up with $1B.